Unlike many professionals, preachers generally don't begin their ministries with a desire to get rich. In fact, for most preachers income is a secondary concern -- their primary motivation for becoming preachers is to serve others and help to spread God's word. But even preachers have financial needs, and how those needs are met frequently differs from church to church.
Average Preacher's Salary
According to PayScale.com, as of January 2011 the average preacher's salary ranged from $34,479 to $57,531 per year.
Factors Influencing Preacher Salaries
A preacher's salary is influenced by a host of factors, including the local cost of living, the size of the congregation (larger churches generally paying more than smaller ones), full- or part-time employment status, years of education (with master's degrees or doctorates commanding higher salaries), years of experience (with more experienced preachers earning more) and the amount of money the previous preacher made. Some other factors include the size of the preacher's family (preachers with larger families are sometimes afforded more generous salaries) and the benefits included.
Benefits Included in Preacher Compensation
Most churches offer some form of benefits package as part of their preacher's overall salary package. Some typical pastoral benefits include medical and dental insurance, contributions to a retirement plan, vacation time, disability insurance, personal expense reimbursements (such as use of a personal vehicle), continuing education funds and a provision for a sabbatical from ministry after several years of service.
How a Preacher's Salary is Established
Most preachers' salaries are established by the local church they're serving in. Some churches set their compensation levels based primarily on the preacher's education and years of experience. Others consider first how much the congregation can afford to pay, and then seek out a preacher who fits their salary level. Still others base their pay on a comparison of churches of similar size, or base their salaries on comparable secular professions, such as counselors or teachers. Benefits provided, working hours required, the preacher's level of need and the church's past compensation history can also be factors in establishing a preacher's salary package, and most churches rely on many of these factors to arrive at a fair level of compensation.
Sometimes when a church is unable to pay a larger salary to their preacher, the church will compensate for the income loss with additional, non-monetary benefits, such as providing the preacher with shorter working hours, use of a church-owned vehicle, additional vacation time, or frequent retreat or sabbatical times. Special gifts from the congregation may also be included.
Another way in which preachers' salaries are increased is by designating a significant portion of their salary as a "housing allowance" -- that is, funds provided for the maintenance of a primary residence. This designation makes that portion of the preacher's salary tax free, thus increasing his net income without changing his salary level.